Many revenue-producing ship owners and operates overlook the fact that more money may be made by operating the ship at low speeds. At first thought, this may seem to be incongruous; that is, the faster the cargo or passengers are carried to the destination port, the higher would seem to be the profit of the voyage. However, a careful analysis of all operating costs surprisingly illustrates that the faster voyage is not necessarily the more profitable voyage. The reason for this is that the relationship between ship speed and energy consumed to produce speed is not linear. For example, to move a ship through water at 15 knots, as opposed to 10 knots, typically requires 350 percent more fuel to obtain a 50 percent increase in speed. On the other hand, while speed reductions may save fuel costs, it is also true that fixed costs associated with the vessel tend to increase as voyage time lengthens. To illustrate this point, reference is made to Table I which illustrates an example of profit per voyage for a ship based on averaged published data for numerous cargo carrying vessels. The specific numbers in Table I may bear little relationship to an individual ship or the operations of a specific company; nevertheless, the example illustrates the principles involved in the present invention.
TABLE I __________________________________________________________________________ 1000 MILE VOYAGE - COSTS PER VOYAGE SHP REQUIRED TO MAINTAIN TIME REQUIRED SPEED SPEED (HORSE FOR VOYAGE FUEL FIXED TOTAL (KNOTS) POWER) (HOURS) COSTS COSTS COSTS __________________________________________________________________________ 10 1368 100 $2901 $33000 $35901 11 2359 91 4552 30300 34852 12 3137 83 5521 27900 33421 13 4334 77 7077 26100 33177 14 6205 71 10048 24300 34348 15 9157 67 13122 23100 36222 16 13804 62 16456 21600 38056 17 16654 58 20483 20400 40883 18 21798 55 25423 19500 44923 19 28119 53 31603 18900 50503 20 35803 50 37962 18000 55962 21 45051 48 45856 17400 63256 __________________________________________________________________________
As seen from Table I, the fuel costs increase dramatically, at an exponential rate, as the speed is increased. The fuel costs are directly related to the propeller shaft horsepower (SHP) required to maintain a particular speed. On the other hand, because the time required for the voyage decreases with increasing speed, the fixed costs decrease with increasing speed. The total cost of the voyage is essentially the sum of the fuel costs and the fixed costs and is illustrated in the far right column in Table I. For this particular example, it is seen that the total costs are minimized at approximately 13 knots. This information is extremely valuable for any vessel, whether revenue-bearing or not, to minimize costs of operation.
For purposes of this analysis, fuel costs are assumed to be the only variable cost, all other expenses being considered fixed costs. It is also assumed in Table I that there is a constant demand for a vessel's services and that it will be in service the maximum amount of time possible. For example, ten hours of "in port" time per thousand miles of travel is assumed. Fixed costs, that is all costs other than fuel costs, are allocated on the basis of the number of hours in a year (i.e., 8760).
Table II is provided below to illustrate the correlation between total costs and profit per voyage for a revenue-bearing vessel.
TABLE II ______________________________________ 1000 MILE VOYAGE - PROFIT PER VOYAGE PROFIT REVENUE PROFIT AS PER- SPEED TOTAL PER PER CENTAGE (KNOTS) COSTS VOYAGE VOYAGE OF SALES ______________________________________ 10 $35901 $38600 $2699 6.9% 11 34852 38600 3748 9.7% 12 33421 38600 5179 13.4% 13 33177 38600 5423 14.0% 14 34348 38600 4252 11.0% 15 36222 38600 2378 6.1% 16 38056 38600 543 1.4% 17 40883 38600 (2283) 0 18 44923 38600 (6990) 0 19 50503 38600 (11903) 0 20 55962 38600 (17362) 0 21 63256 38600 (24656) 0 ______________________________________
Table II utilizes the total costs from Table I for each vessel's speed and subtracts these from an assumed value for the voyage. As is illustrated from the two right hand columns in Table II, profit is maximized at the same speed, 13 knots, at which the total costs are minimized.
As is clear from Table I, the primary ship parameter to be considered in determining variable cost of ship operation at different speeds is the shaft horsepower (SHP). In U.S. Pat. No. 3,972,224 (Ingram) there is disclosed a system for continuously providing a direct readout of shaft horsepower and fuel rate efficiency. The shaft horsepower is computed on the basis of monitored values of the shaft torque and rotational velocity. The indications of instantaneous shaft horsepower and instantaneous fuel usage are provided for use by the vessel operator in any manner seemed fit. However, as will be noted from the discussion set forth above relating to Tables I and II, a mere indication of shaft horsepower or fuel rate efficiency (i.e. variable cost of vessel operation) does not provide the vessel operators with sufficient information to determine the proper vessel speed for minimizing total operating costs and/or maximizing profit for a voyage.